New York Attorney General sues over fradulent mortgage scheme

New York Attorney General Eric Schneiderman has sued a Brooklyn law firm and its partner for allegedly participating in a fraudulent mortgage rescue scheme. The suit was filed Wednesday against Gennady Litvin and two firms where he is a principal partner, Litvin Law Firm in Brooklyn and Litvin, Torrens & Associates in Miami.

The lawsuit, filed in Manhattan Supreme Court, states, “Petitioner brings this special proceeding to permanently enjoin Respondents from engaging in deceptive, fraudulent and illegal business practices that target distressed homeowners who are seeking to lower their mortgage payments or save their homes from foreclosure and to recover restitution, damages, disgorgement, civil penalties and costs.”

It’s alleged that the Respondents, directly and through third party marketers, deceptively induced homeowners to pay a fee of typically $595.00 or $750.00 per month by representing that they would provide them with a comprehensive legal services plan that would allow them to avoid foreclosure or obtain a mortgage modification. As a result, vulnerable homeowners have paid Respondents thousands of dollars for services they could have obtained from qualified non-profit housing counselors or legal services attorneys for free. The Respondents routinely failed to prevent foreclosure or obtain a loan modification as promised. In fact many of the consumers never met or spoke with an attorney, court documents state.

The Respondents claim to do business in 31 states and said clients will be represented by a licensed foreclosure attorney who is licensed in their respective state.

Schneiderman also accused Litvin of false advertising and deceptive business practices as well as other claims related to misrepresentation.

The lawsuit notes that Connecticut, Georgia, and North Carolina have issued cease and desist orders to Litvin Law Firm and Litvin, demanding they stop soliciting for services in those states. The firm and Litvin are banned from doing business in Rhode Island and the Maryland Attorney General’s office has charged them with engaging in unfair and deceptive trade practices.

Carol Thompson is a veteran investigative reporter residing in central New York. She spent 23 years with a local newspaper, The Valley News, before leaving for the Syracuse New Times, and now, VNN. Thompson has won dozens of first-place awards for investigative reporting and was the 2006 recipient of the Syracuse Press Club’s prestigious Selwyn Kershaw Professional Standards Award. Thompson’s reporting has resulted in the arrest of public officials and has prompted policy changes. She uncovered two money laundering schemes that traveled the globe and resulted in the indictments of several developers.